Unchained Podcast – "DEX in the City: When NYSE Goes Onchain, What Happens to Financial Intermediaries?"
Host: Laura Shin
Guests:
- V (former SEC, now in Web3)
- Katherine “KK” (TradFi & tech at C Darkware)
- Alex Sosos (General Counsel, Superstate; ex-SEC, ex-Coinbase)
Date: January 22, 2026
Episode Overview
This episode dives deep into the evolving landscape of financial markets as blockchain technology, specifically tokenization, begins disrupting traditional finance (TradFi) infrastructure. The discussion centers on what happens when established players like the New York Stock Exchange (NYSE) embrace onchain solutions, exploring legal, regulatory, and practical implications for intermediaries. The hosts are joined by Alex Sosos, General Counsel at Superstate, who brings first-hand experience from key regulatory and industry roles, to discuss tokenization’s impact, market structure reforms, SEC policy, and current experiments like those at DTC and NYSE.
Key Discussion Points & Insights
1. Regulatory Context: The SEC & Market Infrastructure
-
SEC Divisions 101
- V explains the main functions of the SEC’s Enforcement, Corporation Finance (Corp Fin), Investment Management, and Trading & Markets divisions.
- Trading & Markets: Oversees the "plumbing" of US capital markets, particularly secondary trading and infrastructure under the 1934 Act.
- Quote [04:47, V]:
“The SEC has I think something like 20 or more divisions and offices… Trading and Markets… handle the plumbing… oversee the plumbing of the capital markets in this country.”
-
Historical Layering of Law over Infrastructure
- Alex contextualizes market structure, noting that US securities laws (1933, 1934 Acts) retrofitted existing trading practices, leading to the current system of self-regulatory organizations (SROs) like NYSE and FINRA.
- Quote [09:12, Alex]:
“The wheels on the car got changed midstream… laws applied to infrastructure that predated them.”
2. Why Tokenize? The Value Proposition
- Tokenization allows for:
- Efficiency gains: Instant/atomic settlement, lower costs, fewer intermediaries
- Programmability: Smart contracts unlock features like DeFi lending, new governance mechanisms
- Investor empowerment: Openness to self-custody, peer-to-peer transfer
- Issuer benefits: Direct investor relationships, improved corporate governance
- Systemic risk reduction: Decentralization decreases single points of failure (e.g., critical infrastructure attacks)
- Quote [17:06, Alex]:
“You give these securities themselves like crypto superpowers—that’s programmability… It allows for self-custody, a lot more investor choice… creates resiliency and redundancy within the system.”
3. Superstate x Galaxy: Tokenizing Public Equities
- Superstate’s partnership with Galaxy enables the onchain movement of publicly-traded stocks, setting a precedent for issued securities existing as tokens on blockchains.
- Galaxy approached the SEC for guidance, ultimately receiving no further comments after work by Davis Polk (their legal counsel).
- Superstate acts as transfer agent, using an allowlist to ensure regulatory compliance and accurate shareholder records.
- Tokenization Models Explained:
- Superstate/Securitize Model: Official, onchain share registry – holders have direct rights.
- Receipt Token/ADR Model: Third-party receipts representing underlying foreign assets (more counterparty risk; less direct governance).
- Quote [25:35, Alex]:
"What we serve for Galaxy is… create a regulatory perimeter… [so] the issuer can know who [the holders] are… we do that through administering an allow list."
4. Incumbents Enter the Arena: DTC & NYSE Go Onchain
- DTC (Depository Trust Corporation) 'Sandbox':
- No-action relief from SEC to experiment with tokenization under less stringent oversight.
- Opportunity for innovation, but skepticism—could disrupt their central clearing/settlement monopoly.
- Quote [34:33, Alex]:
“DTC… got the ability to kind of have a sandbox where they can exchange your shares for a digital representation and potentially do some fun and different things with them there.”
- NYSE Announcement:
- Plans for a platform offering trading/onchain settlement of tokenized US equities and ETFs.
- Part of a broader trend: Wall Street looking to avoid “blockbuster-video” obsolescence.
- Legacy players seek to evolve rather than risk irrelevance. Expect parallel systems (off-chain & on-chain) for some time.
5. The Fate of Intermediaries
- Tokenization could sideline or transform roles like transfer agents, brokers, and clearinghouses.
- The transition won’t be binary; instead, expect long periods of hybrid models (e.g., certificated securities still exist, book entry securities dominate).
- Regulators face pressure to ensure fairness, competition, and investor protection during the shift.
- Quote [38:33, Alex]:
“I think there’s existential challenges [for the DTC], but I also don’t think it’s a 0 and 1… There’ll be parallel systems that exist. If the regulators allow for innovation… you have competition and increased investor choice.”
6. Philosophical Shift: Tokenization & Deregulation
- Project Crypto (at the SEC): Seen as less about crypto-specific regulation and more as a rethink of regulation, leveraging blockchain to make some existing interventions obsolete.
- Market-driven competition, empowered by technology, might replace prescriptive market rules.
- Quote [43:31, V]:
"My secret theory about Project Crypto is that it’s not really about crypto per se, and that it’s really about rethinking regulation more broadly."
7. Hot Topics: Resistance and Life Cycles of Incumbents
- Trade organizations and market makers (SIFMA, Citadel) currently resist reforms that could threaten rent-seeking business models.
- Prediction: These players will eventually transition to dominating new onchain ecosystems once adoption reaches a tipping point.
- Quote [46:47, Alex]:
“Citadel is one of the strongest players pushing against tokenization right now because they profit handsomely… Once [tokenization is] fully adopted… they’ll be the biggest arbitrage between traditional and onchain markets.”
Notable Quotes & Memorable Moments
- [00:06, KK]:
"Just a reminder, tokenized securities are securities."
- [21:01, KK]:
"...if a nation state actor shuts down one security system, it disables all of our flights. Which… has basically happened…"
- [50:28, Alex]:
“The key is always to look at statements that are being made by players… obviously [Superstate] has an interest in a more tokenized future… But you have to look at the motivations of those entities and their core businesses.”
Important Timestamps
- 04:45 – 09:12: Overview of SEC divisions and historical context of US securities law and self-regulation
- 14:22 – 20:31: What prompted Superstate's creation, value of tokenization, and programmability
- 22:59 – 29:50: Superstate's Galaxy partnership details; tokenization models; regulatory engagement with the SEC
- 32:49 – 38:33: DTC and NYSE moves into onchain tokenization; legacy institutions responding to disruption
- 41:09 – 46:47: Conversation on parallel systems, deregulatory philosophy, and how incumbents are positioning around disruption
- 46:47 – 50:28: Realpolitik on resistance and adaptation among industry incumbents (Citadel, SIFMA)
Summary Table: Tokenization Models Discussed
| Model | Key Feature | Examples | Pros | Cons/Limitations | |--------------------------------|------------------------------------------------|--------------------|------------------------------------|---------------------------------------------| | Superstate/Securitize Model | Onchain share registry, direct property rights | Galaxy + Superstate| Direct rights, regulatory clarity | Currently less common for public equities | | Receipt Token/ADR Model | Receipts represent underlying off-chain asset | Ondo, Backstage | Permissionless transfer possible | Counterparty risk, indirect governance |
Tone and Style
The conversation is a blend of regulatory deep-dive, practical market analysis, and casual banter. Technical explanations are frequently “translated” for listeners less versed in legal or market jargon, and the hosts carry an irreverent, fast-paced, insider-y tone ("where the wallets are cold and the takes are hot"). The group is candid both about progress and about the ongoing bottlenecks in U.S. policy and market infrastructure.
Additional Resources Mentioned
- V’s influential article on the history of market structure
- Details on the DTCC/DTC no-action letter (Dec 2025)
- Robinhood’s integration with Daffy for charitable crypto donations
This thorough and insightful episode demystifies the technical, legal, and business ramifications of bringing Wall Street assets onchain—mapping what’s real, what’s hype, and what’s next for both builders and incumbents in the age of tokenized finance.